Lowe's 4Q profit rises 39 percent; outlook weak

By MAE ANDERSON, AP Retail Writer
| 5:46 a.m.Feb. 23, 2011

In this Feb. 20, 2011 photo, the outside of a Lowe's store is shown in Dallas. Lowe's Cos.' fourth-quarter net income rose 39 percent as homeowners took on more renovation projects as the economy slowly recovers (AP Photo/LM Otero)
— AP

In this Feb. 20, 2011 photo, the outside of a Lowe's store is shown in Dallas. Lowe's Cos.' fourth-quarter net income rose 39 percent as homeowners took on more renovation projects as the economy slowly recovers (AP Photo/LM Otero)
/ AP

Still, home-improvement retailers are seeing signs of life from shoppers as they take on projects around the house that were delayed during the consumer spending slowdown and recession.

"While uncertainty in the market remains, the economic recovery is continuing," said CEO Robert Niblock.

The No. 2 home-improvement retailer said its net income rose to $285 million, or 21 cents per share, for the three months ended Jan. 28 from $205 million, or 14 cents per share, a year ago. Analysts surveyed by FactSet expected 18 cents per share.

"While the housing market remains uncertain, we believe Lowe's will continue to gain market share and benefit from a more stabilized environment," said Bank of America Merrill Lynch analyst Alan Rifkin, who kept his "Buy" rating on the stock. "Further, we favor Lowe's increased focus on shareholder returns and believe buybacks and dividends will continue to drive returns."

For the year, Lowe's net income rose 13 percent to $2.01 billion, or $1.42 per share, from $1.78 billion, or $1.21 per share a year ago.

Annual revenue rose 3 percent to $48.82 billion from $47.22 billion.

Lowe's expects first-quarter net income of 34 cents to 38 cents per share while analysts expect net income of 38 cents per share. The company predicts revenue will rise 2 percent and revenue in stores open at least a year will be flat.

For the year, the company expects net income of $1.60 to $1.72 per share on a 5 percent revenue increase. Revenue in stores open at least a year is expected to rise 5 percent. Analysts expected earnings of $1.66 per share.